Doing Business in India.Pdf

Doing Business in India

March 2019 Background

The Government of India took the task of transforming India into a manufacturing power through the ‘Make in India’ campaign launched on September 25, 2014. A national program designed to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure. While several initiatives are being undertaken to provide adequate physical and social infrastructure such as industrial corridors, cluster, zones, etc. it is encouraging to note that the Government of India (GoI) has embarked on ambitious reforms focused on improving India’s performance in the World Bank’s Doing Business rankings. India is ranked 77 among 190 economies in the ease of doing business, according to the latest World Bank annual ratings.

Investment climate in India has also improved considerably since the opening up of the economy in 1991. With an aim to attract and promote FDI, GoI has put in place a policy framework on FDI, which is transparent, predictable and easily comprehensible.

This toolkit covers information on Setting up Business in India such as types of permitted business establishments, commencing business in India by a foreign investor, foreign company incorporation process – LO/ BO/ PO, business registration process and Central & State level compliances.

Moreover, it covers the FDI related information across sectors such as how much FDI is permitted under different sectors via automatic/ Government route. The toolkit further covers the institutional and regulatory framework such as routing FDI in India, concerned administrative Ministries/ Departments, applicable regulatory framework for business establishments, governing bodies for business establishments and winding-up business. Contents

Abbreviations • Related Compliances Introduction to the toolkit • Company wind-up

1. Setting up Business in India 4. Annexures • Types of permitted business establishment • Annexure I: List of Documents required for • Foreign company incorporation process- DSC, DIN LO/BO/PO & foreign bank branch • Annexure II: List of Documents required for • Registration process- OPC, Pvt. Ltd., LLP, FLLP OPC, Private Limited • Pre- commissioning and post commissioning • Annexure III: List of Documents required for of operations LLP, BIS • Annexure IV: List of Documents required for FIFP 2. Foreign Direct Investment in India • Annexure V: List of Documents required for • Permitted sectors Foreign Bank Branch • Prohibited Sectors • Annexure VI: Investment Options for • Eligible Investors & Instruments Foreigners • Compliances/Requirements • Annexure VII: Contact

3. Institutional & Regulatory framework • Regulatory set-up • Institutional set-up Abbreviations

AD Authorized Dealer ECB External Commercial Borrowing AF Angel Fund FCCB Foreign Currency Convertible Bond ADR American Depository Receipts FCNR (B) Foreign Currency Non-Resident Account AIF Alternative Investment Fund FDI Foreign Direct Investment Act or the Act Companies Act, 2013 FEMA Foreign Exchange Management Act AD Authorized Dealer FPI Foreign Portfolio Investor AoA Articles of Association FIFP Foreign Investment Facilitation Portal BO Branch Office FVCI Foreign Venture Capital Investor CA Chartered Accountant FII Foreign Institutional Investor CCEA Cabinet Committee on Economic Affairs GDR Global Depository Receipts CCS Cabinet Committee on Security GoI Government of India CoI Certificate of Incorporation GST Goods and Service Tax CRC Central Registration Center InvITs Infrastructure Investment Trusts CS Company Secretary JV Joint Venture DDT Dividend Distribution Tax KYC Know Your Customer DEA Department of Economic Affairs LLP Limited Liability Partnership DPIIT Department for Promotion of Industry and Internal Trade LO Liaison Office DR Depository Receipt Max Maximum DSIM Department of Statistics and Information Management PROI Person Resident Outside India DGIT Director General of Income Tax DGP Director General of Police DIN Director Identification Number DSC Digital Signature Certificate Abbreviations

Min Minimum SEBI Securities and Exchange Board of India MoA Memorandum of Association SEZ Special Economic Zone MoU Memorandum of Understanding SME Small and Medium-sized Enterprise MCA Ministry of Corporate Affairs SMS Short Message Service MSME Micro, Small and Medium Enterprise TAN Tax deduction account number NBFC Non-Banking Financial Companies TDR Transferable Development Rights NFRA National Financial Reporting Authority TDS Tax Deducted at Source NGO Non Government Organization UTI Unit Trust of India NOC No Objection Certificate VC Venture Capital NPO Non- profit organization WOS Wholly-owned Subsidiary NRE Non-Resident Entity IBC Insolvency and Bankruptcy Code NRE Account Non-Resident (External) Rupee Account NRI Non-Resident Indian NRO Account Non-Resident Ordinary Rupee Account PAN Permanent Account Number PIB Press Information Bureau PIO Person of Indian Origin PO Project Office PSU Public Sector Undertaking PGBP Profit and Gains on Business and Professions RBI Reserve Bank of India REIT Real Estate Investment Trust RoC Registrar of Companies 1 Setting up Business in India Types of permitted business establishments Commencing business in India by foreign Investor Foreign company incorporation process- LO/BO/PO Business Registration process Central level process/compliances State level process/compliances Setting up Business in India Types of permitted business establishments

One Person Private Ltd Public Ltd Company Company Company Sole Proprietorship

• The Companies Act 2013 A private company is a company A public company is a company • Sole proprietorship is a enables formulation of new which has the following which has the following form of business in which type of entity i.e. One Person characteristics: characteristics: one person owns all the Company (OPC). An OPC means assets of the business, in a company with only 1 person • Shareholders right to transfer • Shareholders right to transfer contrast to partnership or as a member shares is restricted shares is not restricted corporations • Shareholder can make only 1 nominee, who shall become a • Minimum number of 2 • Minimum 7 shareholders • No legal formalities are shareholder incase of death / members in company required to create a sole incapacity of original • Publishing a prospectus proprietorship other than stakeholder • Number of shareholders is become mandatory incase of an appropriate licensing to limited to 200 public issue conduct a business and • Only a natural person who is registration of business Indian Citizen &ROI shall be • An invitation to the public to • A company which is a name if it differs from that eligible to act as member & subscribe to any shares or subsidiary of a public company, sole proprietorship nominee in OPC debentures or any type of shall be deemed to be a public security is prohibited company even where such • The owner reports income/ • A person can be nominee in subsidiary continues to be loss from this business only 1 OPC • 1 Resident director mandatory private company in AoA along with personal income tax return • 1 Resident director mandatory • 1 Resident director mandatory (Min stay of 182 days)

Note - Resident Director : sec 149 (3) – Every company should have at least one director who has stayed in India for a total period of not less than 182 days in the financial year (wef. 7 May 2018) Setting up Business in India Types of permitted business establishments

Limited Liability Foreign Company Partnership firm Partnership

• Partnership firms are • LLP is an alternative corporate • Incorporated outside but created by drafting a business entity that provides the having a place of business partnership deed among benefits of limited liability of a in India (section 2(42)) the partners. The company but allows its members partnership deed is the flexibility of organizing their • Liaison office - To registered to make a firm internal management on the basis represent parent company of a mutually-arrived agreement, as in India • Partnership firms in India is the case in a partnership firm are governed by the • Branch office- To Indian Partnership Act, • Introduced in India by way of undertake activities such 1932 Limited Liability Partnership Act, as Export, Import of 2008. LLP is a separate legal entity goods; research, • Maximum no. of partners consultancy etc. in a partnership firm can • Min 2 partners required be 20 • Project Office- Activities as • LLP shall have 2 designated per contract to execute • The Profit & Loss are partners who are individuals and at project shared in manner as least one of them shall in be agreed in the partnership Resident Partner • As per company law, a deed resident having PAN to be • Individual/ Body corporate may be appointed for receiving • Min 2 partners required a partner in LLP notices in India for foreign company

Note - As per the section 7 (1) resident DP means a person who has stayed in India for at least 182 days during the immediately preceding 1 year. Setting up business in India Comparative analysis of different business establishments in India Private Company vis-à-vis Public Company vis-à-vis OPC vis-à-vis LLP

Particulars Private Public OPC LLP

Min Members 2 7 1 2 partners

Max Members 200 Unlimited 1 No Limit

Min Directors 2 3 1 2 Designated Partners

Max Directors 15* 15* 15* NA

Resident Director 1 Mandatory 1 Mandatory 1 Mandatory 1 Designated Partner

Transfer of Ownership can be Ownership can Ownership can be Ownership can ownership transferred be transferred transferred to nominee in be transferred the event of death of owner

Subscription of Public subscription Public subscription Public subscription Public subscription shares not allowed allowed not allowed not allowed

Issue of Prospectus Not Mandatory **Mandatory Not Mandatory Not Mandatory

Managerial No limit for Shareholder approval is NA Remuneration is based Remuneration managerial personnel required, If remuneration on LLP agreement payable is above limits

Note: Resident Director : sec 149(3) – Every company should have at least one director who has stayed in India for a total period of not less than 182 days in the Financial Year. *Company may appoint more than fifteen directors after passing a special resolution, further provided that such class or classes of companies as may be prescribed, shall have at least one woman director (Rule 3 of The Companies (Appointment and Qualification of directors) Rules, 2014) ** In case of public issue Setting up business in India Comparative analysis of different categories of company (contd.) Private Company vis-à-vis Public Company vis-à-vis OPC vis-à-vis LLP

Particulars Private Public OPC LLP Commencement of Declaration to be filed Declaration to be filed Declaration to be filed Immediately after Business/ prior to commencement prior to commencement prior to commencement obtaining certificate Operations of incorporation

Pvt Co is a separate legal Public Co is a separate legal OPC is a separate legal LLP is a separate legal Legal Status entity registered under entity registered under entity registered under entity registered under Companies Act, 2013. Companies Act, 2013. Companies Act, 2013. LLP Act, 2008. The The Directors The Directors The Directors Designated partners of are liable are liable are liable LLP are liable for for defaults made under for defaults made under for defaults made under contraventions under the the act the act the act act

Governing Act/ Law Companies Act, 2013 Companies Act, 2013 Companies Act, 2013 LLP Act, 2008

Annual Statutory Annual statement of Annual statement of Annual statement of Annual statement of Filings accounts & accounts & accounts & solvency & annual return with ROC annual return with ROC annual return with ROC annual return with ROC

Annual Filings & IT return to be filed.filed IT return to be filed.filed ITIT returnreturn toto bebe filedfiled . ITITreturn returnto tobe befiled filed. and Audit Audit mandatory Audit mandatory Audit mandatory. Auditauditmandatory mandatoryin incase case turnoverturnoverexceeds exceedsINR 40 lakhs orINRcontribution 40 lakhs exceeds INR 25 lakhs Setting up business in India Commencing business in India by foreign Investor Foreign Investor can commence business in India as:

For carrying out EXIM, Research For carrying out manufacturing/services and other related business and project execution operations operations

Foreign OR Indian OR Limited Liability Company** Company* Partnership To represent Subject to provisions of JV / Wholly parent company in LLP Act, 2008 Liaison Joint Venture Owned Subsidiary India as (i) Private LLP Office FDI permitted under To undertake Limited or (ii) automatic route in LLPs activities such as Public Limited operating in Export, Import of Company, s.t. Branch sectors/activities where goods; research, Companies Act, 100% FDI is allowed, Office consultancy etc. 2013 through the automatic Wholly route and there are no Activities as per Owned Project contract to FDI-linked performance Subsidiary conditions*** Office execute project

*Incorporate company in India s.t. sectoral caps and requisite approvals **RBI guidelines regarding establishment of LO/BO/PO: https://rbi.org.in/Scripts/NotificationUser.aspx?Id=10398&Mode=0. As per company law, a resident having PAN to be appointed for receiving notices in India for foreign company ***For detailed definitions, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28,2017, Amendment to FDI policy in Jan 2018 Setting up business in India As a foreign company incorporation - LO/BO/PO

Branch Office (BO) Liaison Office (LO) Project Office (PO)

Permitted BO can be set up by foreign companies. The LO can not undertake any PO can be set up to execute activities permitted activities include export/import of commercial activity and acts as a specific projects in India and goods; rendering professional or consultancy channel of communication between cannot undertake or carry on services; carrying out research work, in which the principal place of business or any activity other than the the parent company is engaged; promoting head office and entities in India. Its activity relating and technical or financial collaborations between role is limited to collecting incidental to execution of the Indian companies and parent or overseas group information about possible market project company; representing the parent company in opportunities and providing India and acting as buying/selling agents in information about the company and India; rendering services in information its products to prospective Indian technology and development of software in customers. It can promote India; rendering technical support to the export/import from/to India and products supplied by the parent/ group also facilitate technical/financial companies and foreign airline/shipping collaboration between parent company company and companies in India. It cannot earn any income in India Foreign Company Company Foreign There is a general permission to non-resident companies for establishing BO in the Special Economic Zones (SEZs) to undertake manufacturing and service activities subject to: • BOs are functioning in those sectors where 100% FDI is permitted • BOs comply with Chapter XXII of the Companies Act, 2013 • BOs function on a stand-alone basis Setting up business in India As a foreign company incorporation - LO/BO/PO

Branch Office (BO) Liaison Office (LO) Project Office (PO)

Eligibility Profit making track record during Profit making track record during NA the immediately preceding five the immediately preceding three financial years in the home country financial years in the home and net worth of not less than USD country and net worth of not less 100,000 or its equivalent than USD 50,000 or its equivalent.

Validity NA Generally for 3 years As per the tenure of the *except in the case of NBFCs and project those entities engaged in construction and development sectors, for whom the validity

period is two years only Foreign Company Company Foreign

Remittance Permitted to remit profits net of NA Intermittent remittances by applicable taxes and on submission companies pending winding of requisite documents up permitted s.t. satisfaction of AD Category 1 bank

Note - An applicant that is not financially sound and is a subsidiary of another company may submit a Letter of Comfort (LOC) (Annex A) from its parent/ group company, subject to the condition that the parent/ group company satisfies the prescribed criteria for net worth and profit Setting up business in India Foreign company incorporation process- LO/BO/PO

Exception: RBI approval required in following cases: (i) applicant is a citizen of or is registered/incorporated in Pakistan ; (ii) applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a BO/LO/PO in Jammu and Kashmir, North East region and Andaman and Nicobar Islands; (iii) principal business of the applicant falls in the four sectors namely Defence, Telecom, Private Security and Information and Broadcasting (s.t. certain relaxations) and (iv) applicant is a Non-Government Organization (NGO), a Non-Profit Organization, or a Body/ Agency/ Department of a foreign government.

1. Application (Form FNC) to a AD Category 1 bank Form FNC along with supporting documents

2. Post evaluation and before approval- bank forwards a copy of the Form FNC along with the details of the approval proposed to be granted by it to RBI for allotment of Unique Identification Number (UIN) to each BO/LO

Exceptions- Foreign banks and insurance companies do not require UIN from forex department RBI

Foreign Company Company Foreign 3. After receipt of the UIN from the Reserve Bank, the AD Category-I bank issues the approval letter to the non-resident entity for establishing BO/LO in India

4. inform designated AD Category I bank as to the date on which the BO/LO/PO has been set up.- bank in turn shall inform RBI

Note : In case the BO/LO/PO for which approval has been granted is not opened within 6 months from the date of the approval letter, the approval shall lapse. In cases where the non-resident entity is not able to open the office within the stipulated time frame due to reasons beyond its control, the AD Category-I bank may consider granting extension of time for a further period of 6 months for setting up the office. Any further extension of time shall require the prior approval of RBI Setting up business in India Foreign company incorporation process- LO/BO/PO

5. Applications for establishing a BO/LO in India by foreign banks and insurance companies will be directly received and examined by the Department of Banking Regulation, RBI, Central Office and IRDA, respectively. No UIN for such representative offices is required from the Foreign Exchange Department, Reserve Bank of India.

Note : There is a general permission to non-resident companies to establish POs in India, provided: i. they have secured a contract from an Indian company to execute a project in India ii. project must have secured the necessary regulatory clearances; iii. Project is funded directly by inward remittance from abroad; or the project is funded by a bilateral or multilateral International Financing Agency, or a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project

6. March 31 – submit annual activity certificate (AAC) to AD Category 1 Bank Other Registrations Applicants from Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau or Pakistan desirous of opening BO/LO/PO

in India shall have to register with the State Police authorities Foreign Company Company Foreign ▪Registration with RoC if reqd. as per companies Act, 2013 ▪BO/LO to obtain PAN from Income Tax authorities

NOTE : Branches of Foreign Banks Foreign banks do not require separate approval under FEMA, for opening branch office, however they require necessary approval under the provisions of the Banking Regulation Act, 1949, from Department of Banking Regulation, Reserve Bank. Setting up business in India Foreign company incorporation process- LO/BO/PO

Foreign company after being registered with the RBI ought to get itself registered with the Ministry of Corporate Affairs (MCA), for it to be registered as an establishment of a foreign company in India 7. Necessary documents shall be filled with the Registrar of Companies (RoC) within 30 days of establishment

Note : As per Section 380 of Companies Act, following documents shall be filled : • Certified copy of the charter, statutes or memorandum and articles, of the company or other instrument constituting or defining the constitution of the company and, if the instrument is not in the English language, a certified translation thereof in the English language; • Full address of the registered or principal office of the company • List of the directors and secretary of the company containing such particulars as prescribed under Rule 3. • Name and address or the names and addresses of one or more persons resident in India authorised to accept on behalf of the company service of process and any notices or other documents required to be served on the company • Full address of the office of the company in India which is deemed to be its principal place of business in India • Particulars of opening and closing of a place of business in India on earlier occasion or occasions • Declaration that none of the directors of the company or the authorized representative in India has ever been convicted

Foreign Company Company Foreign or debarred from formation of companies and management in India or abroad. • Other Documents as may be prescribed.

8. Rule 3(3) of the Companies (Registration of Foreign Companies) Rules, 2014 requires application in Form FC-1 to be supported with an attested copy of approval from the Reserve Bank of India under Foreign Exchange Management Act and the rules and regulations thereunder or a declaration from the authorised representative of such Foreign Company that no such approval is required.

Note: For more information on Foreign companies regulations as per companies act, refer chapter XXII - http://www.mca.gov.in/MCASearch/search_table.html (Sec 379 –sec 393) Setting up business in India Foreign company incorporation process- Setting up Foreign Bank branch in India

Licensing of Licensing of New Banks in the Private Sector & “On Tap” licensing for new banks in Private sector

• Eligible Promoters: i. Individuals / professionals who are residents [as defined in FEMA Regulations, as amended from time to time] having 10 years of experience in banking and finance at a senior level. ii. Entities / groups in the private sector that are ‘owned and controlled by residents’ [as defined in FEMA Regulations, as amended from time to time] and have a successful track record for at least 10 years, provided that if such entity / group has total assets of ` 50 billion or more, the non-financial business of the group does not account for 40 per cent or more in terms of total assets / in terms of gross income iii. Existing non-banking financial companies (NBFCs), that are ‘controlled by residents’ [as defined in FEMA Regulations, as amended from time to time], and that have a successful track record for at least 10 years will be eligible to convert into a bank or promote a new bank • Fit & Proper criteria : Entities / groups should have a past record of sound credentials and integrity, be financially sound with a successful track record of 10 years. For this purpose, RBI may seek feedback from other regulators and

enforcement and investigative agencies. Foreign Bank Foreign NOHFC: The NOFHC shall be wholly owned by the Promoter / Promoter Group. The initial minimum paid-up voting equity capital for a bank shall be `5 billion. The NOFHC shall initially hold a minimum of 40 per cent of the paid-up voting equity capital of the bank which shall be locked in for a period of five years. At least 50% of the Directors of the NOFHC should be independent directors.

Foreign Shareholding in Bank : The Regulatory framework : The foreign bank branches shall be governed by Banking Regulation Act, aggregate non-resident 1949, Reserve Bank of India Act, 1934, Foreign Exchange Management Act, 1999, Payment and shareholding in the new bank shall Settlement Systems Act, 2007, Credit Information Companies (Regulation) Act, 2005, Deposit not exceed 49% in first 5 years . Insurance and Credit Guarantee Corporation Act, 1961, other relevant Statutes and the Directives, issued by RBI , SEBI and other regulators

For more information on Guidelines for Licensing of New Banks in the Private Sector act, refer TO RBI guideline https://rbi.org.in/scripts/bs_pressreleasedisplay.aspx?prid=28191 , & https://rbidocs.rbi.org.in/rdocs/Content/PDFs/GOTL01082016BB321081EF5A45A489080187CA4CA690.PDF Setting up business in India Foreign company incorporation process- Setting up Foreign Bank branch in India

Licensing of Licensing of New Banks in the Private Sector & “On Tap” licensing for new banks in Private sector

Application process • Applications shall be submitted in the prescribed form (Form III) as per Rule 11 of the Banking Regulation (Companies) Rules, 1949. The applicants should furnish the requisite information as per the Annex II. • Applications for setting up banks in the private shall be made to Chief General Manager, Department of Banking Regulation, Reserve Bank of India, Central Office, 13th Floor, Central Office Building, Shahid Bhagat Singh Road, Mumbai- 400001 • The licensing window will be open on-tap. As such, applications in the prescribed form along with requisite information could be submitted to RBI at any point of time, as desired by the applicant

Procedure by RBI • Applications will be screened by RBI to assess the eligibility of the applicants vis-à-vis the criteria laid down in the guidelines • RBI may apply additional criteria to determine the suitability of applications, in addition to the ‘fit and proper’ criteria Foreign Bank Foreign prescribed at paragraph 2 (B). • The applications will be referred to a Standing External Advisory Committee (SEAC) to be set up by RBI. The SEAC will set up its own procedures for screening the applications. SEAC has right to call for more information as well as have discussions with any applicant/s and seek clarification and submit its recommendations to RBI for consideration • The Internal Screening Committee (ISC), consisting of the Governor and the Deputy Governors will examine all the applications and then submit its recommendations to the Committee of the Central Board (CCB) of RBI for the final decision to issue in-principle approval. • The validity of the in-principle approval issued by RBI will be 18 months from the date of granting in-principle approval and would thereafter lapse automatically. Therefore, the bank will have to obtain the licence within a period of 18 months of granting the in-principle approval.

Note: The setting up of a wholly owned subsidiary by a foreign bank in India would require a specific approval from the RBI and the home country regulator of the bank. Accordingly, the foreign bank would have to make an application with their home country regulator and subsequently with RBI meeting the conditions 18 prescribed by RBI for issuance of a banking license. Setting up business in India Incorporation of Company: Overview Incorporation of Company Check availability of name / registered trademark for 0 1 RUN 2 DSC incorporation of company Reserve name of the proposed company through online service 1 RUN on MCA website. Name can also be applied through SPICe.

3 Filing for Incorporation Obtain Digital Signature Certificate (DSC) for at-least one through form Spice 2 proposed Directors of the Company. DIN for proposed Directors can only be applied for through form SPICe. Form INC 32 (SPICe) to be duly filled and submitted to RoC for Incorporati 3 Allotment Apply for incorporation of company. PAN and TAN are shall be auto Business on of new of DIN PAN/ TAN generated based on details filed in the SPICe form Types - company Private, 4 Filing of electronic Memorandum of Association (eMoA - INC Public , & 33) & Articles of Association (eAoA- INC 34) in SPICe . For Producer foreign subscribers physical MoA and AoA to be executed and 5 Company attached , Nidhi 4 eMOA 5 eAOA Company 6 SPICe upload and fee payment is confirmed by MCA

Central Registration Centre (CRC) verifies/scrutinises all the Certificate/ Notarization 7 documents and forms and may suggest few changes to be made Spice upload & Incorporation in the attachments or form itself. One needs to make necessary 6 7 8 Obtain CoI fee payment (CRC to verify) changes accordingly 8 Obtain certificate of incorporation (CoI). CIN, PAN &TAN numbers are allotted at the time of registration 9 Declaration of commencement A company having share capital is required to file a declaration of receipt of business 9 of subscription amount and verification of registered office within 180 days of incorporation and prior to commencement of business. State Registration Process as applicable Note : Notarization & Apostilling / legalization of documents mandatory in case of foreign subscribers / Directors . Some registrations would be applicable based on state in which company is incorporating and nature of business entity. Setting up business in India Incorporation as an LLP: Overview

Incorporation of Limited Liability Partnership (LLP) and Foreign LLP (FLLP) 1 Obtain class 2 or class 3 Digital Signature Certificate (DSC) for at-least 1 designated partners of LLP 1 DSC For a quick search on already existing names of LLP a facility is provided by MCA to check list of similar/closely resembling 2 Availability check for LLP names of existing companies/LLPs. Trademark is also to be 2 name checked Filing the proposed name of LLP for approval from the Reservation and approval 3 Registrar of Companies through RUN – LLP and can also be of name for LLP through 3 done through FiLLiP Business RUN - LLP Types - FiLLiP is to be duly filled and submitted to RoC for Filing for incorporation of LLP incorporation of LLP. For Foreign LLP (FLLP) Form 27 is to be 4 LLP/ FLLP/ DPIN and obtain 4 Certificate of Incorporation filed in and digitally signed by FLLP (DPIN must be obtained through FiLLiP. Form 3 (Information with regard to LLP agreement and 5 LLP Agreement 5 changes, if any made therein) to be filled within 30days of incorporation of LLP.

Note : Some registrations would be applicable based on state in which company is State Registration Process as applicable incorporating and nature of business entity. Setting up business in India Central level process/compliances

Obtain Director Digital Signature Certificate Approval for proposed Identification Number (DIN) (DSC) for proposed Directors Company/ LLP Name

DIN is a unique identification number DSC can be obtained by approaching For LLP name search facility (of existing issued by the Ministry of Corporate Certifying Authorities (CAs) with companies / LLPs) is available on MCA Affairs (MCA), for a designated partner original supporting documents and portal. The system will provide the list of of an existing LLP or a person self-attested copies similar/closely resembling names of existing intending to become a director of a companies/LLPs based on the search company. A licensed Certifying Authority (CA) criteria filled up. For registration of name issues the digital signature. Certifying RUN LLP to be filed. DIN can be obtained by filing Authority (CA) means a person who application Form DIR-3 online has been granted a license to issue a The applicant must file e form RUN with the digital signature certificate under Central Registration Center (CRC), India for All designated partners of the proposed Section 24 of the Indian IT-Act 2000 approval of name. LLP shall obtain “Designated Partner Identification Number (DPIN) / Director The name reserved for company shall be Identification Number (DPIN)” through available for adoption of name for a period FiLLiP & proposed company through of 20 days. In case of laps of the said SPICe (if DIN is not available) period, fresh approval needs to be taken from RUN or RUN-LLP is to be taken. For Note – Application for DIN (for a person LLP name is reserved for 3 months. Incase proposed to be appointed as a Director of of change of name of company, the

Setting up legal existence of the entity the of existence legal up Setting existing company or Designated Partner reserved name is available for 60 days. of existing LLP) to be filed in Form DIR-3. Change in particulars to be intimated in Form DIR-6 within 30 days Setting up business in India Central level process/compliances (contd.)

Finalization of Verification of Consent to establish supporting Filing of e-forms documents & operate documents with CRC

Issue of Certificate of Filing of electronic SPICe is duly filled and After payment of all fees & Incorporation by CRC- Once all Memorandum of submitted to CRC for stamp duties, CRC the Forms are duly approved by Association (eMoA- INC incorporation of company scrutinizes all forms and CRC, the digitally signed “Certificate of Incorporation” is 33) & Articles of . may suggest changes in issued. Association (eAoA- INC forms and/or attachments 34) MCA form FiLLiP for LLP In Case of LLP, LLP agreement is would be required Payment of stamp duty/ required to be signed and filing fees. Form 27 is required for submitted to ROC within 30 days of incorporation of LLP Foreign LLP (FLLP) Incase of foreign subscribers physical Once the Incorporation MOA and AOA is to be Certificate is received, LLP can

filled in start it’s operations. Setting up legal existence of the entitythe of existencelegal up Setting A company having share capital is required to file a declaration of receipt of subscription amount and verification of registered office within 180 days of incorporation and prior to commencement of business. Setting up business in India Central level process/compliances (contd.)

Grant for Bureau of Obtain Permanent Registration for Quality Marking Indian Standards (BIS) Account Number (PAN) Tax Account Certificate Number (TAN) License

PAN number shall be allotted TAN number shall be Applicant has to submit Quality Marking based on the information allotted based on the application in the certificate are filled in Form SPICe at the information filled in Form prescribed Form & Self provided by time of incorporation of a SPICe at the time of Evaluation-cum- Quality Marking company. incorporation of a Verification Centre of the company. Report along with State Government prescribed documents and original test Note: PAN & TAN are not allotted to LLPs on incorporation report(s) taxes) for considering grant of license under Product Certification Scheme of

Setting up legal existence of the entity the of existence legal up Setting BIS.

List of products that mandatory require BIS license are listed in Annexure I Setting up business in India State level process/compliances (contd.)

Acquisition of Registering / Approval for State Land IEM/ EM Registration categorization of unit in Incentives (Optional) State

For starting a manufacturing unit Apply for state government All industrial undertakings exempt from in any state, the first step for the incentives/ customised package the requirements of industrial licensing, company is to register themselves scheme for Mega projects as per including existing units undertaking as MSME or Mega or Large state policies (Optional) substantial expansion, are required to file Projects. The criteria to categorise information in the prescribed form for a unit into MSME or Mega Project Industrial Entrepreneurs Memorandum or Ultra Mega Project is defined (IEM), i.e. “Form IEM”, with the the in respective industrial Secretariat of Industrial Assistance (SIA), policies of states. This would Department for Promotion of Industry benefit the units to apply for and Internal Trade (DPIIT), Government

various incentives available under of India, and obtain an Starting/ Registering unit a in State state government Policies/ acknowledgement. No further approval is Scheme in addition to other required specific policies. Optional for all Micro and small enterprises; Service sector medium enterprises; mandatory for manufacturing sector medium enterprises.

E-biz - Link Statelevel process/compliances Settingin India up business Starting/ Registering a unit in State Medium Small Micro Enterprise manufacturing Industries access enterprises provides registration MSME MSME Criteria Criteria MSME Rule MSMERegistration 5 crores = 10 > crores 25 Lakhs > = 5crores > = 25 Lakhs machinery & plantinInvestment Manufacturing sector to subsidies Micro, Registration with under & are service Small a and the host schemes categorized and enterprises is MSMED of Medium an benefits 2 crores = 5 > crores 10 Lakhs > = 2crores > = 10 Lakhs equipment)Investment Service sector . Act : optional sized that into and Guideline Guideline the commences registration employing Schedule license A link 2006 Industries form), still exceptional themselves The 12 MSME unit digit prescribed file Udyog for can can which with Aadhaar Udyog - registration I Centre(DIC) or less be apply even cases, Aadhaar in production, the Schedule means registered form than Aadhaar case number for for General including 50 those PRC they of items Registration . - / II Udyog 100 Articles Memorandum by it allotted of for have Manager items has listed filling the workers those any Aadhaar to licencing an not included to in item Udyog apply can of Schedule Aadhaar MSME with/without (GM) covered not that be ,in Memorandum for Aadhaar Exemption having in done offline by does of permanent Schedule - number III DIC under the and Aadhaar not online Memorandum mode power concerned Notification items . (contd.) require the - II However, are . registration by (i Once can MSMED number, . not e listed . individuals industrial on apply the listed District . . in paper It in Units unit can the is Act for on all in a Statelevel process/compliances Settingin India up business Pre- Commissioning Phase Corporation Corporation (SSIDC) Industrial Development Corporation/ Scale Small Corporation Infrastructure(SIDC)/ State Industrial Development respective Application to Acquisition Acquisition of Land State DI/ State proposals, Stage accorded within Ministry/SEIAA category Stage Environment under EIA (Category both Notification only EIA Proposals platform at the be made (EC) need to Application for environment clearance Wildlife Clearance Environment, Forest and notification notification 1 CRZ one - 2 clearances CRZ - Grant by by MoEF. automatically A A Proposals notification requiring Grant month, and Clearance 2014 or Clearance do of 2006 2006 Category category . ToR EC not then, without i . Proposals EC . e Proposals and 2011 . ( is - take If, to clearance Standard 2 TOR after EC CRZ B stage the B online online under any TOR both) Land Acquisition of proposals, Clearance clearance accepting proposal accorded requiring requiring process decision TOR under under CRZ is . . ► ► ► Concerned departments: outside an industrial area industry Applicable in case located Permission for Land Use Collector authority/ Local District Country Planning and Department Town of (DI) State Industries of Directorate (contd.) Setting up business in India State level process/compliances (contd.)

Pollution Board Industrial License Consent to Establish

Application to State Pollution Boards Industrial licenses are regulated by the IDRA, Consent to establish is before commencement of 1951 Act, and are approved by the Secretarial required from Environment construction activities and of Industrial Assistance (SIA) on the and pollution control board production activities under Water Act recommendation of the licensing committee. for starting the building and Air Act for Consent to Establish construction activity of the Businesses planning to establish industries to and CTO respectively is to be made produce any of the following items in India unit. An application is to be There are 4 categories of industries- must obtain a compulsory license: made to concerned bodies at Distillation and brewing of alcoholic drinks; the state pollution board and ▪ Red – Industries having pollution ➢ Cigars and cigarettes of tobacco and index score of 60 and above central level for environment

Commissioning Phase Commissioning manufactured tobacco substitutes; clearance - ▪ Orange- Industries having ➢ Electronics and aerospace and defence pollution index score of 41 to 59 Pre equipment; ▪ Green - Industries having pollution ➢ Industrial explosives including detonating index score of 21 to 40 fuses, safety fuses, gun powder, ▪ White- Industries having pollution nitrocellulose and matches; and index score up to 20 ➢ Hazardous chemicals including items hazardous to human safety and health and Note- The approval is granted by thus fall for mandatory licensing. state and compliance procedure may Form IL vary from state to state Statelevel process/compliances Settingin India up business

Pre- Commissioning Phase The layoutThe plan approved non is competent authority the stateof to subject the criteria specific metby the factorychemical daysand 45 for other factories approvalThe grantedis days 60 within for competent authority may vary from state to state . Labour’s Department state each of however the Layout required. is Plan usually It grantedis by the Under the Factoryapproval 1948 Act, for Factory Factory Layout Plan Approval – transferrable. the the State in anyGovt. other case. appealed from the Statewasof and Govt. to appeal to Central the if the Govt. decision may within days 30 dateof refusal, such of registration/ factory,licensing a of the applicant construction extension or a factoryof to or refuses to grant the to site,permission Where the State or ChiefGovt. Inspector be deemed haveto granted. application wassubmitted, shall permission the within months 3 from the date the which on If order no communicatedis to applicant the the State Govt. description factoriesof the to Chief inspector or toneeds submit plans the anyof class/ per As Factory registration The FactoriesThe 1948 Act , the the , applicant (contd.) Statelevel process/compliances Settingin India up business Pre- Commissioning Phase form For further details and request) undertaken.is final inspection (upon months, 6 within the which authority for period the of granted by the competent Provisional registration is inspection. is granted post successful Permissionfor registration mandatory compliance. registration Boiler is of per Boiler 1923, the Act As Boilers Boilers Registration of link to be be referredto certificate toconstructioncommence applicant received commence Construction Project. Post the this with during different Under of phases conditions that needs be complied to Disapproval or basicallyIOD states construction of. Intimation of authorities before starting layout plan from concerned applicant to has get approval of construction the building. of The plan and the layout approval for the approval building comprisesthe of Building LocalThe Body Acts. Building Byelaws,Master plan and permit under provisionsthe of building of sanction plans/ building authority/ nodal localauthority for An approval from development Building Building Plan Approval authority authority the of state by competentthe the criteria specific met within days 30 subject to The approval is granted state . may vary from state to competent authority state each however the Labour’s Department of usually granted by the approval required. It is 1970 Abolition) Act, Labour (Regulation and Under the Contract 1970 Contract Labour Act Registration under authority authority the of state by competentthe the criteria specific met within days 30 subject to approvalThe grantedis vary from state to state . competent authority may state each however the Labour’s Department of usually granted by the stage.commissioning It is pre and post approval required during Workers 1996 Act, other Construction Under the Building and BOCW BOCW Act Registration under (contd.) Statelevel process/compliances Settingin India up business Pre- Commissioning Phase construction construction phase applicable during the as connection Tension or (HT),Extra High tension (LT),high tension power supply for low Company of sanction for Electricity Distribution State Application to construction Power for department Fire and Safety Approval from State Provisional Fire Safety Approval Provisional Fire separately operation accordedis installation and Approval givenis for state authority. obtained from local approval needs be to Lift and escalator Escalator Approval for lifts & (contd.) Statelevel process/compliances Settingin India up business Post- Commissioning Phase fromto time time tosubject is renewal stage.commissioning It both pre states. requiredis It in of respectivethe Pollution control board obtained from Consent operateto is operate operate Consent to - rules rules are satisfied. completion certificate, if all the building plan and awards the premise against approvedthe and inspects evaluates the project, the authority local After the a completion of allotment copy. plan, scrutiny fees and land Panchayat applicable) as with Nagar NigamGram or as other localsuch bodies agricultural department development authority or Localmunicipality , Town and Country Planning or , obtain from document that builder a should criticala is and mandatory legal completion A certification (CC) certificate Building Completion Application to or or authority statelocal to be taken by approval needs Final Fire Approval Final Fire extraction water ground of case in Commission Water to and dam; canal/ river/ is water of source where applicable) (where Boards Promotion Industrial State to connections; water for approval for Corporations Development Industrial State Water Connection Central Ground Ground Central (contd.) Statelevel process/compliances Settingin India up business

Post- Commissioning Phase as applicable as High Tension connection tension or (HT),Extra tension (LT), high power supply for low Company for of sanction Electricity Distribution Application to Power State hazardous waste Authorization for Hazardous waste Hazardous of Disposal and Storage Transport/ Treatment/ Reception/ Collection/ for Boards Control Pollution State to Application (contd.) Statelevel process/compliances Settingin India up business Post- Commissioning of operations application and GSTIN within working7 days 04 REG information/ documents are askedthrough Form officer verifies your application/ document. In morecase number shall be received GST The via email. mobile/ the the document as per business type. Fill id. portal The email verifies your detail OTP.via Upload Government India. of Fill the Any canbusiness get TaxExcise/Service have to register under by GSTdefault registered under any of the states) of Anyturnover whose business exceeds the threshold limit GST Registration INR 20 lakhs (INR 10 lakhs forlakhs (INRlakhs 10 20 INR within within working7 days. GST officer approves GST Online Online GSTPortal - received number through OTP.Application reference 03 willhave registerto under GST. Businesses details have to be shared through Form registered under GSTby or at Form GSTSeva Kendra up setby the pre - - part part A GST laws:VAT, North North Eastern and hill (PAN, Mobile and Form - part B applying applying via GST GST - using using REG - . - registering registering authority apply to the in Form I to required company is The authority. the from prescribed registration certificate of pay and tax shall obtain a government to liable is the an officer of every employer being (not Act, Tax the Profession of 5 According section to Registration Professional Tax petroleum petroleum units based liquor for is and Excise Note be obtained. to is the whereof registration in respect premises jurisdiction over the having Central of Excise with the Superintendent be filed registration to is The Registration Central Excise application – (contd.) Applicability Applicability of for for Setting up business in India State level process/compliances (contd.)

Shops & Establishment Act Employee Registration with ESIC

Registration under Shop & Establishment is Employees' State Insurance Corporation provided by state government (ESIC) provides monetary and medical benefits to Employees in case of sickness, maternity and employment injury and to of Operation of make provisions for related matters. Form 01 should be used by employers to

register with ESIC

Commissioning

- Post Statelevel process/compliances Settingin India up business Post - Commissioning of Operations link be done through can EPFO registration Online for 1952. Act Provisions Fund and Miscellaneous Provident the Employees’ which on establishments of benefits Employees to security provides social Fund Organization (EPFO) Provident Employees' The with with EPFO Employer Registration link at detailed is registration trademarkof guide step for by step multiple A steps. registration involves mark. Trademark the the owner of markto for exclusivity use of the provides legal right of registration Trademark Registration Trademark/ Brand documents. documents. the supporting necessary Foreign Trade along with Directorate of General the to be made Code application IE renewal or filing. and doesn't require any throughout existence its by used entity the be can when issued Codes India. Government of IE and Industries, Ministry Commerce of Foreign Trade (DGFT), Directorate of General by issued the Code is India. from IE services exporting and goods importing persons or registration a required for Import (IE)Code is Export Code Code (IEC) Importer Exporter must must link at accessed branch the of can be workingand functions importer. detailed The the supplier and the relationship between involving transactions investigating the in specializes the a Branch Special Valuation Valuation Branch Customs branch Custom (contd.) (“SVB”) is of of - House that that House Special 2 Foreign Direct Investment Permitted sectors Prohibited Sectors Eligible Investors & Instruments Compliances/Requirements – Reporting Requirements – Guidance on Issue, Transfer, Conversion & Remittance of Shares Foreign Direct Investment (FDI) in India Investment climate in India has improved considerably since the opening up of the economy in 1991. This is largely attributed to ease in FDI norms across sectors of the economy. India, today is a part of top 100 club on Ease of Doing Business (EoDB) and globally ranks 1st in the greenfield FDI ranking. India jumps 65 positions from 142nd (2014) to 77th (2018) in 'World Bank's Ease of

Doing Business Ranking 2018'. Category Category 1

100% FDI permitted through Automatic route Category Category 2

100% FDI permitted through Government route Category Category 3

Upto 100% FDI permitted through Government + Automatic route Category Category 4

Upto 51% FDI permitted through Government/ Automatic route

•Note: i) In sectors/ activities not listed above, FDI is permitted up to 100% on the automatic route, subject to applicable laws/regulations; security and other conditions. (ii) All the information/ contents provided herein is basis the Consolidated FDI Policy dated August 28, 2017 issued by DPIIT from time to time as amended from time to time For detailed definitions, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28,2017* *Amendment to FDI policy in Jan 2018 Foreign Direct Investment (FDI) in India Category 1 : 100% FDI permitted through Automatic route*

mining for Agriculture & Animal Plantation (Tea, Coffee, Rubber, Mining & Exploration of metals & Coal & Lignite Single Brand Husbandry Cardamom, Palm oil tree, Olive oil non-metals ores excluding titanium captive consumption in Retail Trading, tree) bearing minerals and its ores respect of eligible activities Duty Free Shops

Airports** & Railway Transport services*** Construction Development Cash & Carry Civil Aviation – Greenfield & Infrastructure projects**** Wholesale Trading Brownfield

Exploration of Petroleum & Natural Broadcasting Market Place E- Gas (including marketing of petroleum Carriage Services commerce Activities Asset Reconstruction & Credit Other Services at products & natural gas) Information Companies Airport *****

Other Financial Up-link of non-’News & Current Affairs’ Pharmaceuticals – Services (registered/ TV Channels, Down linking of TV channel Greenfield Sector regulated entity) White Label ATM Industrial Park and Medical device Operations manufacturing *For detailed definition, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28, 2017 , amendment to FDI policy in Jan 2018 ** Greenfield and existing projects, ***Air Transport Services- Non Scheduled Air Transport Service / Helicopters services/ seaplane services requiring DGCA approval ****Construction Development: development of townships, construction of residential/commercial premises, roads or bridges, hotels, resorts, hospitals, educational institutions, recreational facilities, city and regional level infrastructure, townships, Real estate Broking business *****Other services include ground Handling Services subject to sectoral regulations and security clearance & Maintenance and Repair organizations; flying training institutes; and technical training institutions Foreign Direct Investment (FDI) in India

Category 2 : 100% FDI permitted through Government Route

Mining and minerals separation of Retail Trading including through e-commerce in respect Publishing/ printing of scientific and technical titanium bearing minerals& ores of food products manufactured and/ or produced in magazines/specialty journals/ periodicals its value addition & integrated India activities

Government Route (Approval from various Administrative Ministries/ Government Department)* Publication of facsimile edition of Satellites-establishment foreign newspapers and operations

Foreign investment in core investment companies (CIC) and other investing companies, engaged in the activity of investing in the capital of other company/ies/LLP, is permitted under Govt. approval route. CICs will additionally have to follow RBI regulatory framework

*For detailed definition, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28, 2017 , amendment to FDI policy in Jan 2018 Foreign Direct Investment (FDI) in India

Category 3 : Up to 100% FDI permitted through Government + Automatic route

Telecom Up to Automatic route Above Government route Services* 49% 49%

Defence industry Up to 49% Automatic route Above 49% Government route

Pharmaceutical - Up to Automatic route Above Government route Brownfield 74% 74%

Air Transport Up to Automatic route Above Government route Services ** 49% 49%

Banking – Up to 49% Automatic route Above 49% Government route Private Sector Up to 74%

Automatic route Government route Private Security Up to 49% Above 49% Agencies*** Up to 74%

For detailed definition, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28, 2017 , amendment to FDI policy in Jan 2018 * All telecom services including Telecom Infrastructure Providers Category-I, viz. Basic, Cellular, United Access Services, Unified License (Access Services), Unified License, National/International Long Distance, Commercial V-Sat, Public Mobile Radio Trunked Services (PMRTS), Global Mobile Personal Communications Services (GMPCS), All types of ISP licenses, Voice Mail/Audio text/UMS, Resale of IPLC, Mobile Number Portability Services, Infrastructure Provider Category-I (providing dark fibre, right of way, duct space, tower) except Other Service Providers. ** Air Transport Services- Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline; Regional Air Transport Service- 49% automatic. Could go up to 100% via Govt. approval *** FDI in Private Security Agencies is subject to compliance with Private Security Agencies (Regulation) (PSAR) Act, 2005, as amended from time to time Foreign Direct Investment (FDI) in India

Category 4 : Up to 51% FDI permitted through Government/ Automatic route

Infrastructure Companies Insurance Petroleum Refining by PSUs* Power Exchanges Pension Sector in Securities Markets Automatic route Automatic 49% 49% 49% 49% 49%

Print Media-Publishing Up-linking of ‘News & Terrestrial Broadcasting of Newspapers & Periodicals Publication Multi-Brand Retail Trading Banking Public Sector of Indian editions of foreign magazines Current Affairs’ TV Channels FM (FM Radio) ** dealing with news and current affairs*** Government route Government 49% 49% 51% 20% 26% For detailed definition, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28, 2017 , amendment to FDI policy in Jan 2018 * Petroleum refining by the PSU without any disinvestment or dilution of domestic equity in existing PSUs – 49%, Automatic ** In specified states ***Print Media- Publishing of newspaper and periodicals; Indian editions of foreign magazines dealing with news and current affairs

49% in Air India- Govt. route (amended vide PN1 of 2018) Foreign Direct Investment (FDI) in India Prohibited Sectors

Lottery Business including Gambling and Betting Government/private lottery, Nidhi company including casinos* Chit funds online lotteries , etc.*

Sectors not open to private Manufacturing of cigars, sector investment- atomic Real Estate Business or Trading in Transferable cheroots, cigarillos and energy, railway operations Construction of farm Development Rights (TDR) cigarettes, of tobacco or of (other than permitted houses** tobacco substitutes activities mentioned under the Consolidated FDI policy)

Notes

*Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business and Gambling and Betting activities

**Real estate business shall not include development of townships, construction of residential/ commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations, 2014 Foreign Investment in India Eligible Investors & Instruments

Eligible Investors

Erstwhile OCB Company, FPI in terms of NRIs as per SBI registered FEMA (Transfer schedule 3 & FVCI in any Any non- NRI resident incorporated trust or Capital outside India & partnership or Issue of 4 inText terms of activity mentioned resident & citizens of in Schedule 7 of instruments - not under firm Security by FEMASWOT Equity, CCPS, entity / (Transfer or FEMA (Transfer Nepal & adverse notice incorporated Persons CCDs IssueAnalysis of or Issue of Individual Bhutan of RBI with outside India & Resident Security by Govt./RBI owned and Outside India) Security by PROI) approval control by NRI Regulations PROI) Regulations 2017 Regulations DRs & FCCBs

► FDI policy 2017 ► Amendment vide FIFP, PN1 of 2018 DPIIT, ► FEMA Regulations GOI ► SEBI Regulations Others- Warrants &

Regulatory Policy Policy Regulatory Paid up shares LLPs in sectors Startup NRI/PIO VCF registered Non Residents wherein FDI is companies can resident as Trusts and (other than 100% allowed issue equity/ outside India Indian regulated by NRI/PIO) can Sponsored through equity linked can invest in companies can SEBI and invest in issue capital ADR/ GDRs automatic route instruments or Partnership ‘Investment Partnership Firm against FDI & no FDI linked debt instruments Firm/ Vehicle’ / Proprietary performance or convertible Proprietary (REIT/INVIT/AIF) Concern condition notes Concern

Eligible Investee Entities

Note: Currently as per the extant FEMA regulations, a firm or a proprietorship concern is restricted from receiving any funds from a non-resident (other than NRI/ PIO). However, RBI on making a specific application and post consideration of the facts may allow the same on case to case basis. Accordingly, a specific RBI application for approval would have to be made in case where a firm or proprietorship concern is willing to receive from a non-resident. Foreign Direct Investment (FDI) in India *Compliances/Requirements - Reporting Requirements

Funds Received from Allotment of Shares Form FC-GPR (SMF) Foreign Entity

60 Days 30 Days

Illustration: Documents for Form FC-GPR

• CS certificate • Declaration by the Authorised Representative of the Indian • Pre and post shareholding pattern in the Indian company Company/LLP • Copy of the order of the High Court on the scheme of merger/ • Copy of government approval (if applicable) demerger/ amalgamation (if applicable) • RBI approval on the amount of refund with respect to the amount • Valuation certificate of the issue (if applicable) • Relevant RBI approvals for an issue of equity shares against funds • Approval letter (if non-compliant with the guidelines – if applicable) payable to the foreign investor • FIRC/ Debit statement • Know Your Customer (KYC) • Board Resolution

* As per the RBI notification on “Foreign Investment in India - Reporting in Single Master Form” of 7th June 2018, now provides for all the extant reporting structures of various types of foreign investments in India are now provided under a Single Master Form (SMF) which is required to be filed online. As per the RBI Notification ARF and FC-GPR is merged into a single revised FC-GPR (SMF). All new filings for the Form FC-GPR (SMF) have to be done in Single Master Form only. Foreign Direct Investment (FDI) in India Compliances/ Requirements - Allotment, Transfer, Conversion & Remittance of Shares

Issue of Shares Issuance within 60 days from day of receipt of inward remittance; else refunded immediately to non- resident investor by outward remittance through 1 normal banking channels or by credit to NRE/FCNR (B) account as the case may be within fifteen days Repatriation from the date of completion of 60 days Repatriation for dividend and Interest Transfer of capital instruments 4 Dividend and interest on fully, mandatorily & Permission granted to Non-Resident (NR) / Non- compulsorily convertible debentures is freely Resident Indian (NRI) for acquisition of capital repatriable without any restrictions instruments in following ways: NR to NR, NRI to NRI, NRI to Resident, Resident to NRI, while a person resident outside India can sell capital instruments of an Indian company on a recognized Stock Exchange in India through a registered stock broker. Transfer between resident and non-resident should be in 2 compliance with extant guidelines and reporting needs to be done in Form FC-TRS. In respect of transfer of Remittance capital instruments between resident and non- Remittance of asset (i.e. sale proceeds of share and resident, an amount not exceeding 25% of the total securities and their remittance) is governed by the consideration can be deferred or settled through 5 Foreign Exchange Management (Remittance of Assets) escrow mechanism. Regulations, 2016 under FEMA

Conversion into Equity 45 Indian companies have been granted general permission for conversion of External Commercial Borrowings (ECB) (excluding those deemed as ECB) in 3 convertible foreign currency into equity shares/fully compulsorily and mandatorily convertible preference shares, subject to conditions Foreign Direct Investment (FDI) in India Guidance on Issue, Transfer, Conversion & Remittance of Shares

Step 1: Issue of shares Step 2a: Transfer of Capital instrument Step 2b: Transfer of Capital instrument

Capital instruments should be issued within 60 days Permission granted to non-residents / NRIs for ► Resident to non-resident- Transfer of capital from day of receipt of inward remittance; else acquisition of Capital instrument by way of transfer instruments by way of gift- prior RBI approval refunded immediately to the non-resident investor in. the following required by outward remittance through normal banking ► Non – resident( other than NRI or erstwhile ► In respect of transfer of capital instruments channels or by credit to NRE/FCNR (B) account. OBC) to Non resident –Transfer shall be between resident and non-resident, an Issue price of shares * permissible FEMA regulations under automatic amount not exceeding 25% of the total route. However, prior approval shall be consideration: required in case the company is engaged in a ► In case of Listed Indian company, not less than ► Can be paid by buyer on a deferred sector which requires Govt. approval under the price worked out in accordance with SEBI basis within a period not exceeding FDI regulations. guidelines 18 months from the date of transfer ► ► In case of unlisted Indian company- not less NRIs/ OCI to PROI - transfer by way of sale or agreement; or gift the Capital instrument provided that prior than fair valuation done by SEBI registered ► can be settled through an escrow Government approval shall be obtained for any Merchant Banker or a Chartered Accountant arrangement between the buyer and transfer in case the company is engaged in a or practicing cost accountant as per any the seller for a period not exceeding sector which requires Government approval internationally accepted pricing methodology 18 months from the date of the on an arm’s length basis Note: PROI (person resident outside India is one transfer agreement; or who has taken up employment/ business or ► For non-residents (including NRIs) making ► can be indemnified by the seller for a vacation outside India and has not stayed in India investment in Indian company by way of period not exceeding 18 months from for more than 182 during the previous year. subscription to its Memorandum of the date of the payment of the full Association, then such investments may be ► Non resident to resident - transfer any Capital consideration, if the total made at face value subject to their eligibility to instrument by way of gift. Transfer of capital consideration has been paid by the invest under the FDI scheme instrument, by way of sale under private buyer to the seller. * in case of convertible capital instruments, the price/ arrangement, subject to extant guideline. conversion formula of the instrument should be ► A person resident outside India can sell capital Note: Transfer is subject to entry routes, determined upfront at the time of issue of the instrument of an Indian company on a sectoral caps/ investment limits and pricing instrument. The price at the time of conversion should recognized Stock Exchange in India through a not in any case be lower than the fair value worked out, registered stock broker or a registered guidelines as per FDI regulations. Disclosure of at the time of issuance of such capital instruments merchant banker in manner prescribed by SEBI such transfer shall be required to be reported in Form FC-TRS based on the relevant FDI ► Resident to non resident- transfer of capital regulations. instrument by way of sale subject to extant guidelines. Foreign Direct Investment (FDI) in India Guidance on Issue, Transfer, Conversion & Remittance of Shares

Step 2c: Transfer of Capital instrument Step 3: Transfer of Capital Instruments Step 4: Conversion into Equity

Transfer from NRI to NRI is applicable on Transfer from resident to non-resident or vice-versa shall Indian companies have been granted general following case basis: not be less than/exceeding: permission for conversion of External a) Where the transfer is b/w two NRIs who (a) the price worked out in accordance with the relevant Commercial Borrowings (ECB) (including matured both hold shares on a repatriable basis – SEBI guidelines in case of a listed Indian company; but unpaid) in convertible foreign currency into such a transfer is similar to transfer b/w (b) the price at which a preferential allotment of shares equity shares/ fully compulsorily and mandatorily non resident – non resident can be made under the SEBI guidelines, as applicable, in convertible preference shares, subject to the b) Where the transfer is between an NRI case of a listed Indian company following conditions who holds shares on non repatriable and (c) the valuation of capital instruments done as per any ► Activity of borrowing company is covered NRI who holds shares on repatriable basis internationally accepted pricing methodology for under the auto or govt. approval for FDI, – such a transfer is similar to transfer b/w valuation on an arm’s length basis duly certified by a resident – non-resident wherever applicable, for foreign equity Chartered Accountant or a Securities and Exchange participation as per extant FDI policy c) Where the transfer is b/w two NRIs who Board of India registered Merchant Banker or a hold shares on non-repatriable basis – practicing Cost Accountant, in case of an unlisted Indian ► The foreign equity after conversion of ECB such a transfer is similar to transfer b/w a Company. into equity is within the sectoral cap, if any resident and another resident (i.e. Reporting of transfer of capital instruments between ► Pricing of shares as per extended guidelines domestic transfer) and hence, reporting residents and non-residents and vice versa is to be done requirements shall not be applicable. ► Compliance with the requirements in Form FC-TRS. The Form FC-TRS should be submitted to prescribed under any other statute and the AD Category-I bank, within 60 days from the date of regulation in force Note: receipt of the amount of consideration. ► General permission is also available for issue a) As per FEMA regulations, any sale of of shares/preference shares against lump capital instrument by NRI held as a non- Prior approval of RBI required: Resident to non-residents sum technical know-how fee, royalty due for repatriable basis would require prior RBI by way of sale payment, subject to entry route, sectoral cap approval authorising the transfer of the • Transfer is at a price which falls outside the pricing said capital instrument if the value is guidelines specified by the RBI from time to time and and applicable pricing guidelines and above USD 1 mn annually. the transaction does not fall under the exception given compliance with applicable tax laws b) An NRI is allowed to repatriate only upto • Transfer involving deferment of payment of the USD 1 mn on an annual basis for its NRO amount of consideration more than 25% of the total Source: RBI, as accessed on 16 January 2019 consideration would require RBI approval. Post account. Any remittance made over and https://rbi.org.in/Scripts/BS_CircularIndexDispl above USD 1 mn in any financial year from approval, the same should be reported in Form FC-TRS, ay.aspx?Id=11456 the NRO account would require an RBI to an AD Category-I bank within 60 days from the date approval. of receipt of the full and final amount of consideration. Foreign Direct Investment (FDI) in India Guidance on Issue, Transfer, Conversion & Remittance of Shares

Step 5: Repatriation Step 6: Remittance

Repatriation for dividend and Interest Sale proceeds of shares & securities: ► Dividend is freely repatriable without any restrictions ► Remittance of asset (i.e. sale proceeds of share and securities ► Dividend is net after tax deduction at source (TDS) or and their remittance) is governed by the Foreign Exchange dividend distribution tax (DDT) (if any as the case may be) Management (Remittance of Assets) Regulations, 2016 under FEMA ► Dividend is governed by Foreign Exchange Management ► AD Category-1 can allow remittance of sale proceeds (net of (Current Account Transactions) Rules, 2000 applicable taxes) of a security to the seller of shares outside ► Interest on fully, mandatorily & compulsorily convertible India provided security has been held on repatriation basis, debentures is freely repatriable without any restrictions. Sale of security has been made in accordance with the ► Interest is net of applicable taxes prescribed guidelines and NOC/ Tax clearance certificate from ► Interest is governed by Foreign Exchange Management the Income Tax department (Current Account Transactions) Rules, 2000

Winding up/ liquidation of companies AD Category 1 banks are allowed to remit winding up proceeds of the companies which are under liquidation subject to payment of taxes . Applicant needs to submit the following to the AD Category 1 bank for remittance ► Auditor’s certificate confirming All liabilities in India have been either fully paid or adequately provided , Winding up is in accordance with the provisions of the Companies Act as applicable and lastly in case of winding up otherwise than by a court- No legal proceeding pending in any court in India against the applicant or company under liquidation 3 Institutional & Regulatory framework Routing FDI in India Concerned Administrative Ministries/Departments Applicable regulatory framework for Business establishments Governing Bodies for Business establishments Winding-up of Business Institutional and Regulatory Set-up Routing FDI in India

Routing Investments in India

Automatic Route Government Route

Sectoral FDI Investment Limit (Consolidated FDI Policy, effective from August 28, 2017 , amendment to FDI policy in Jan 2018 ) • DPIIT is the nodal agency entrusted to formulate FDI Policy

–issues press notes to make amendments in the existing policy and also issues consolidated FDI Policy on an annual basis

• FDI in India is administered under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 notification dated November 01, 2017 (Original notification is available at https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=11161&fn=5 &Mode=0; )

• The procedural instructions are issued by the Reserve Bank of India vide A.P. (DIR Series) Circulars. The regulatory framework, over a period of time, thus, consists of Acts, Regulations, Press Notes, Press Where the online application is digitally signed by an authorised signatory, Releases, Clarifications, etc. there is no requirement for physical submission of the application. However, for applications without a digital signature, once the e-filing of • The revised level of approvals for cases under the Government the application is complete, the applicant is required to file one signed route are summarized in the new notification dated 5 June, 2017 copy of the printed application, along with duly authenticated copies of the documents attached with the application, with the nodal officers of the available at the link: http://fipb.gov.in/Forms/OMabolitionFIPB.pdf concerned Ministry/Department. 50 Institutional and Regulatory Set-up Concerned Administrative Ministries/Departments The work of granting government approval for foreign investment under the extant FDI Policy and FEMA Regulations, shall be entrusted to the concerned Administrative Ministries/Departments as listed below: S. No Sector/ activity Administrative Ministry/ Department 1 Mining Ministry of Mines 2 (a) Defence – items requiring license under the industries(Development & Department of Defence Production, Ministry of Regulation) act 1951 and/or arms act 1959 Defence 2 (b) Cases relating to FDI in small arms. Ministry of Home Affairs 3 Broadcasting. Ministry of Information and Broadcasting 4 Print Media. Ministry of lnformation and Broadcasting 5 Civil Aviation Ministry of Civil Aviation 6 Satellites Department of Space 7 Telecom Department of Telecommunications

8 Private Security Agencies Ministry of Home Affairs 9 Applications involving investments from Countries of Ministry of Home Affairs Ministry of Home Affairs Concern which presently include Pakistan and Bangladesh, requiring security clearance as per the extant FEMA 20, FDI Policy and security guidelines, amended from time to time 10 Single Brand Product Retail Trading DPIIT 11 FDI proposals by Non-Resident Indians (NRIs)/ Export Oriented Units requiring DPIIT approval of the Government 12 Applications relating to issue of equity shares for sectors requiring Govt. DPIIT approval under the FDI policy is allowed under Govt route for following i) import of capital goods/ machinery/ equipment (excluding second hand machinery) and pre-operative/ pre-incorporation expenses (including payments of rents etc.) s.t. conditions Institutional and Regulatory Set-up Concerned Administrative Ministries/Departments S. No Sector/ activity Administrative Ministry/ Department

13 Financial services activity which are not regulated by any Financial Sector Regulator Department of Economic Affairs or where only part of the financial services activity is regulated or where there is doubt regarding the regulatory oversight 14 Applications for foreign investment into a Core Investment Company or an Indian Department of Economic Affairs company engaged only in the activity of investing in the capital of other India Company/ies. 15 Banking (Public and Private) Department of Financial Services 16 Pharmaceuticals Department of Pharmaceuticals

Note • In respect of sectors/activities which are presently under automatic route but required Government approval earlier as per the extant policy during the relevant period, concerned administrative Ministry/Department would be the Competent Authorities for the grant of post-facto approval for foreign investment. • In respect of applications in which there is a doubt about the Administrative Ministry/Department concerned, DPIIT shall identify the Administrative Ministry/Department where the application will be processed. • Proposals for foreign investment would be examined by Competent Authorities as per the Standard Operating Procedure laid down by DPIIT (available at http://www.fifp.gov.in/Forms/SOP.pdf). • In case of proposals involving total foreign equity inflow of more than INR 5000 cr, Competent Authority shall place the same for consideration of Cabinet Committee on Economic Affairs (CCEA). • The CCEA would also consider the proposals which may be referred to it by the Minister in-charge of the concerned Competent Authority. • In respect of proposals where the Competent Authority proposes to reject the proposals or in cases where conditions for approval are stipulated in addition to the conditions laid down in the FDI policy or sectoral laws/regulations, concurrence of DPIIT shall compulsorily be sought by the Competent Authority. • The monitoring of the compliance of conditions under the FDI approvals, including the past cases approved by the Government, shall be done by the concerned Administrative Ministries/Departments. Institutional and Regulatory Set-up Applicable regulatory framework for business entities

Limited Liability The Indian Partnership Companies Act, 2013 Partnership Act, 2008 Act, 1932

► The Companies Act, 2013 ► A corporate business ► An Act to define and passed by the Parliament vehicle that enables amend the law relating to has received the assent of professional expertise and partnership. It lays out the the President of India on entrepreneurial initiative complete structure of a 29th August, 2013 to combine and operate in partnership firm flexible, innovative and constituting definition of ► The act governs efficient manner, partnership firm, its companies, their providing benefits of registration ,management incorporation, allocation limited liability while and dissolution procedure, of share capital, allowing its members the and interrelation between administration, flexibility for organizing partners. State management, reporting their internal structure as governments have made and filing, dissolution and a partnership rules regarding certain compliances of all types of provisions of the act companies under its ► The Act defines of LLP’s, ambit. It also lays down their incorporation, guidelines for conversion to LLP, memorandum of contribution of partners, association and articles of administration, association for different management, reporting types of companies and filing, and dissolution

Others : Income tax Act 1961, GST act, Shops and establishment acts etc. Institutional and Regulatory Set-up Applicable regulatory framework for business entities

LO/ BO/ PO (RBI/ AD Competition Act, 2002 Banks/ other regulators)

► An Act to provide, keeping ► The FEMA Regulations and in view of the economic Companies Act regulates development of the the set up operations and country, for the closure of LO/ BO/ POs. establishment of a There may also be other Commission to prevent sector-specific regulations practices having adverse such as IRDA, to regulate effect on competition, to the entities. promote and sustain competition in markets

► The Act lays down rules and procedure for formation of the competition commission, its administration and management, and its duties, powers and functions. It also talks about the organisation and working of Competition Appellate Tribunal.

Others : Income tax Act 1961, GST act, Shops and establishment acts etc. Institutional and Regulatory Set-up Applicable regulatory framework for business establishments

Taxation Overview in India

Over the last few years, the government of India (GoI) and various State (provincial) Governments have undertaken various policy reforms and process simplification towards great predictability, fairness & automation. This has consequently, lead to India’s meteoric rise to the top 100 in the World Bank’s Ease of Doing Business (EoDB) ranking in 2017.

Key Features of India’s taxation System: Taxes in India are levied by the Central Government and the State Governments. Some minor taxes are also levied by the local authorities such as the Municipality and Local Government.

Major Central Taxes Major State Taxes

► Income Tax ► State Goods & Services Tax (SGST) ► Central Goods & Services Tax (CGST) ► Stamp Duty & Registration ► Integrated GST (IGST) ► Custom Duty

A resident company is taxed on its worldwide income. A non-resident company is taxed only on income that is received in India, or that accrues or arises, or is deemed to accrue or arise, in India. Company whether Indian or foreign is liable to taxation, under the Income Tax Act,1961. Corporation tax is a tax which is levied on the incomes of registered companies and corporations.. Taxes In India are primarily into 2 categories- Direct and Indirect Tax.

Note: For detailed information, please refer to Taxation in India page (https://www.investindia.gov.in/taxation) Institutional and Regulatory Set-up Applicable regulatory framework for business establishments

Goods and Services Tax (GST) is a unified indirect tax across the country on products and services. It is a comprehensive Old Regime GST Regime* levy on manufacture, sale and consumption. It is a destination based consumption tax. • Custom Duty Custom duty • The GST, dual in nature is levied by both the Centre and State. The Central GST (CGST) is levied on intra state • Central Excise Duty (CENVAT) supply of goods and / or service by • Additional Excise Duties and the Excise Duty levied under the Medicinal and Toiletries Preparations Central Government and State GST Act, 1955 Central GST (SGST) is levied by the States. • Service Tax Integrated GST • Integrated GST (IGST) is levied and • Additional Customs Duty (CVD)

administered by the Centre on every Taxes Central • Special Additional Duty of Customs (SAD) inter-state supply of goods and • Surcharges and Cesses levied by the Centre services. • Central Sales Tax • Import of goods or services is treated as • VAT/ sales tax inter-state supplies and is subject to • Octroi and Entry Tax IGST in addition to Basic Custom duty. • Purchase Tax State GST/ • CGST, SGST and IGST is levied at • Luxury tax Union Territory GST uniform rates, mutually agreed upon by • Taxes on lottery, gambling and betting the Centre and the States under the • Entertainment tax (unless levied by the local bodies) aegis of the GST Council (GSTC). Taxes State • Surcharges & State Cesses (related to the supply of goods and services) • All goods and services are covered under GST except alcohol for human consumption and specified petroleum products. Assessment and filing on GST Network (GSTN)

*Cess as may be applicable Institutional and Regulatory Set-up Governing Bodies for business establishment Ministry of Corporate Affairs is primarily concerned with administrationCompaniesof the Companies Act 2013, the Limited Liability Partnership Act, 2008, Competition Act & other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law

Agencies of MCA Agencies under MCA Other Agencies Supervision Registrar of Companies *Competition Commission of India National Company Law Tribunal

Official Liquidators The Institute of Chartered Accountants National Financial Reporting Authority of India Securities Exchange Board of India Regional Directors The Institute of Company Secretaries of India The Reserve Bank Of India

Central Registration Centre The Institute of Cost Accountants ofIndia Central Board of Direct Taxes Central Board of Excise and Customs

Income Tax Department

State Commercial Tax Department

Municipal Bodies/ Local Property tax Department

*affiliated office, as per the MCA website Institutional and Regulatory Set-up 1. Winding-up of business establishments – Voluntary liquidation (companies under Insolvency & Bankruptcy Code (IBC))

Prepare declaration Intimate Statutory Filing application for of solvency and hold authorities and winding up board meeting banker

Obtain shareholders, Submit preliminary NCLT to pass creditors approval & report on verification dissolution order appoint liquidator of claims by liquidator

Public notice inviting Realise assets, claims discharge liabilities and repatriate funds if any

For details w.r.t winding up, refer :

Company : sec 2(94A) and sec 272 of companies act 2013 : http://mca.gov.in/SearchableActs/Section272.htm along with provisions of insolvency and bankruptcy code : http://www.ibbi.gov.in/ LLP : Section 63, 64 and 65 of LLP Act 2008 : http://www.mca.gov.in/MinistryV2/llpact.html Partnership : sec 40-44 of the Partnership Act 1932, http://www.mca.gov.in/Ministry/actsbills/pdf/Partnership_Act_1932.pdf Institutional and Regulatory Set-up 2. Winding-up of business establishments – Strike off under Companies Act

Governed by Companies Act 2013 and Companies (Removal of Name of Companies from the Register of Companies) Rules, 2016 Provides an opportunity for defunct companies to get their names removed from the Register of Members in a time-bound manner, subject to certain conditions

Pre-requisites and Key Considerations Key Milestones

► “NIL” assets and “NIL” liabilities may apply for strike-off ► Pass a Board resolution and hold general meeting to pass subject to following: a special resolution

► Not commenced business within 1 year of ► Obtain No objection certificate from applicable regulators, incorporation; or if any ► Not carrying on any business or operation for 2 immediately preceding financial years ► Prepare statement of accounts close to the tentative date of application ► No pending prosecution or compounding application ► File the application for strike-off along with necessary ► All Directors to sign an Indemnity Bond against all lawful affidavits, bonds, declarations, statement of accounts claims, losses, liabilities that may arise even after striking- off ► RoC to issue a public notice inviting objections and also intimate the Income tax Department ► Any aggrieved person may make an application within 20 years of the strike off for revival of the Company ► RoC to pass an order for strike off on verification of documents

The strike off process is complete on publication of the entity name in the Official Gazette – it takes tentative 6-9 months

For details w.r.t winding up, refer :

Company : sec 2(94A) and sec 272 of companies act 2013 : http://mca.gov.in/SearchableActs/Section272.htm along with provisions of insolvency and bankruptcy code : http://www.ibbi.gov.in/ LLP : Section 63, 64 and 65 of LLP Act 2008 : http://www.mca.gov.in/MinistryV2/llpact.html Partnership : sec 40-44 of the Partnership Act 1932, http://www.mca.gov.in/Ministry/actsbills/pdf/Partnership_Act_1932.pdf 4 Annexures : List of Documents required of DSC, DIN List of Documents required of OPC , Private Limited List of Documents required of LLP, BIS List of Documents required of FIFP List of Documents required of Foreign Bank Branch Investment Options for Foreigners Contacts Annexure I: List of Documents required

DSC DIN

List of documents required for Digital The DIR-3 form must contain a photo of the DIN applicant along with the details Signature Certificate of the applicant and the following documents: ► Address Proof ► In case of Indian nationals, Income-tax PAN is a mandatory requirement for ► Aadhaar card (not mandatory) proof of identity. ► PAN card ► Address proofs like passport, election (voter identity) card, and ration card, ► Photo driving license, electricity bill, telephone bill or Aadhaar shall be attached and ► Email Id should be in the name of applicant only. ► Phone Number ► In case of Indian applicant, documents should not be older than 2 months from the date of filing of the eForm. Note: ► In case of foreign applicant, address proof should not be older than 1 year i. PAN is mandatory for Indian from the date of filing of the eForm. ii. Passport is mandatory for foreigner ► DIN for foreign nationals can be obtained by providing a copy of the foreign iii. Documents to be notarized & nationals passport that is notarised and apostilled and address proof apostilled for foreigners (legalised) in accordance with the country requirements. The passport copy iv. Video and mobile verification is attached for the foreign national DIN applicant must contain the date of birth mandatory. of the applicant. If passport does not include date of birth, then an additional v. Only video verification is required for proof containing date of birth must be submitted, duly certified or attested. foreigners. ► It is mandatory to attach a copy of board resolution for appointment of director in an existing company Annexure II: List of Documents required OPC Private Limited Company

List of documents required for filing OPC List of documents required for filling List of documents required for filling ► PAN of main director and Nominee SPICe form for Private Limited SPICe form for Private Limited Company Director (Both the directors should be Company for Indian Nationals for Foreign National Indian nationals ) ► PAN card is mandatory along with ► Passport (mandatory) ► Address Proof of Director & Nominee any one of: ► Address Proof Director – Passport, Driving License, ► Passport ► Residence Proof Aadhaar , Bank Statement or ► Election Card or Voter ► Bank Statement electricity bill (Any two of these docs Identity Card ► Electricity Bill must be valid and recent ► Unique Identification ► Telephone Bill ► Proof of registered office in India – Number (UIN) ► Mobile Bill Rent Agreement , Sale Deed, Copy of ► Driving License ► Below proofs are common for both Electricity bill, Property Tax receipt . ► Residence Proof (in case present residents and foreign NOC from landlord for use of premises and permanent address are ► Registered Office Proof- proof as registered office different) then following documents of registered office during ► Sign Digital Signature Application required for both addresses the company registration ► Bank Statement process or within 30 days of ► Electricity Bill incorporation of the company ► Telephone Bill ► The notarized copy of lease / ► Mobile Bill rent agreement in the name of the company along with a copy of rent paid receipt not older than one month ► The authorization from the Landlord

Note: For Indian & foreign nationals having DIN, no other proof required if particulars are updated in DIN and declaration to this effect in Form SPICe Annexure III: List of Documents required

LLP BIS

List of documents required for filing form ► List of Products that mandatory require BIS FiLLiP license are : ► PAN Card of the Partners ► Cement ► Address Proof of the Partners ► Household electrical goods ► Utility Bill of the proposed Registered ► Batteries Office of the LLP ► Food and related products ► No-Objection Certificate from the ► Oil pressure stoves Landlord ► Automobile accessories ► Rental Agreement Copy between the ► Cylinders, Valves and Regulators LLP and the Landlord ► Diesel engines ► Medical Equipment's ► Steel Products ► Electrical Transformers ► Electrical motors ► Capacitors ► Chemicals & Fertilizers ► Kitchen appliances ► Domestic water heaters for use of LPG ► Electronics and IT goods ► Solar Photovoltaics, systems, devices & components Annexure IV: List of Documents required FDI approval : Foreign Investment Facilitation Portal (FIFP)

List of documents required for filing application through FIFP: ► Copy of Downstream Intimation ► Certificate of Incorporation of the Investee & Investor ► Copy of relevant past FIPB/SIA/RBI approvals, connected with Companies/Entities (Investee company may be a proposed the current proposal (in case of amendment proposal) entity and may not be incorporated) ► Foreign Inward Remittance Certificate (FIRC) in case investment ► Memorandum of Association (MOA) of the Investee & Investor has already come in and in case of post-facto approval Companies/Entities ► In the cases of investments by entities which themselves are ► Board Resolution of the Investee & Investor pooled investment funds, the details such as names and Companies/Entities addresses of promoters, investment managers as Standard ► Audited Financial Statement of Last Financial Year of the Operating Procedure for Processing FDI Proposals 9 well as all Investee & Investor Companies/Entities the contributors to the investment fund ► Article of Association of the Investee & Investor ► List of the downstream companies of the Indian company and Companies/Entities the details of the equity held by the Indian Company along with ► List of Names and addresses of all foreign collaborators along the details of the activities of the companies with Passport Copy/ Identification Proof of the Investor ► High Court order in case of a scheme of arrangement Company/Entity ► Valuation certificate as approved by a Chartered Accountant ► Diagrammatic representation of the flow and funds from the ► Non-compete clause certificate of the investor and investee original investor to the investee company and Pre and Post company in case of investment in pharmaceutical sector (As shareholding pattern of the Investee Company per Annexure 10 of Consolidated FDI Policy Circular of 2016), ► Affidavit stating that all information provided in hard copy and and as amended from time to time online are the same and correct ► Certificate of statutory auditors as mandated in the FDI policy, ► Signed copy of the JV agreement/shareholders agreement/ as applicable technology transfer/trademark/brand assignment agreement (as applicable), in case there are existing ventures ► Board resolution of any joint venture company ► Certificates of Incorporation and charter documents of any joint venture/company which is a party to the proposed transaction 64 Annexure V: List of Documents required Additional information to be furnished by the Promoters along with relevant supporting documents for setting up Foreign Bank Branch in India (Annex II)

List of documents required for Existing Structure List of documents required for Proposed Structure ► Information on the individual promoters behind the group ► The applicants should furnish detailed information about the A. Self-declaration by the individual promoters as per Appendix persons/entities, who would subscribe to 5 per cent or more of B. Detailed profiles on the background and experience of the the paid up equity capital (shareholding pattern) of the individual promoters, his/their expertise, track record of proposed bank, including foreign equity participation in the business proposed bank and the sources of capital of the proposed ► Information on entities in the promoter group : investors. A. Names and details of other entities in the promoter group as ► The proposed promoter shareholding and plan for dilution of per Appendix II (if not covered in Appendix I). promoter shareholding in compliance with the guidelines. B. Shareholding pattern of all the entities in the promoter ► Proposed management of the bank, if finalized group. C. A pictorial organogram indicating the corporate structure of Project Report all the entities in the group indicating the shareholding and ► A project report9 covering business potential and viability of total assets of the entities. the proposed bank, any other financial services proposed to be D. Annual reports of the past five years of all the group entities. offered, plan for compliance with prudential norms on ► Information on the promoting / converting entity: CRR/SLR10, composition of loan portfolio, priority sector, etc. a. Declaration by the promoting / converting entity as per as per the guidelines, and any other information that they Appendix III. consider relevant. b. Shareholding pattern of the promoting / converting entity. ► The project report should give as much concrete details as c. Memorandum and Articles of Association and financial feasible, based on adequate ground level information and statements of the promoter entity for the past five years avoid unrealistic or unduly ambitious projections. The business (including a tabulation of important financial indicators for the plan should address how the bank proposes to achieve said years), board composition and representation of the financial inclusion and in the case of an NBFC applicant, how Directors over a period of ten years, income tax returns for the existing lending business will fold into the bank or divested last three years, C.A certificate indicating source of funds for / disposed of promoting / converting entity Annexure VI: Investment options for foreigners

Investment options for foreigners

Investment in Investment in unlisted/ Investment listed companies ADRs and Investment Vehicle listed companies (except by NRIs/ through stock GDRs* (REITs, INVITS, AIF) through Stock Exchange) PIOs/ OCI exchange

Repatriable Non- repatriable

Foreign Direct Foreign Foreign Investment Venture Capital Portfolio (FDI) Investor Investors (FPI)

Note: An investor can participate in Indian economy by either commencing business in India (forms explained earlier) via, say the FDI route as outlined above or can invest in the financial markets via a host of available financial instruments. A few of these have been enumerated in the previous slides. In particular, FDI has been explained in detail in Section 2 of this document. Annexure VII: Contacts

Please connect, in case of any queries.

INVEST INDIA (Investment Facilitation Cell)

Vigyan Bhavan, Annexe, Maulana Azad Road, New Delhi 110011 Tel: +91-11-23048155 Email: [email protected] Website: www.investindia.gov.in

FDI Approval related queries MCA related queries

Address: Foreign Investment Facilitation Section DPIIT MCA online service related link: Udyog Bhawan, New Delhi-110001, India http://www.mca.gov.in/mcafoportal/userComplaintDe Email: [email protected] tails.do FIFP Status-Enquiry link : http://www.fifp.gov.in/Authenticate/Login.aspx Disclaimer

We make no claims, promises, assurances, or guarantees about the accuracy, completeness, or adequacy of any information contained in this document. Nothing contained on this website should be construed to constitute a recommendation, endorsement or views of the Government. Since the policy evolves and is amended regularly, the user is advised to ascertain the position as per the Policy and other extant law and regulations at the relevant time. In case of any dispute, the position as per extant law and policy, as amended from time to time shall only be valid.

Invest India, its management, directors, employees or staff, shall not be held responsible or held liable for any information contained in the response/clarification or any action/ consequence arising out of any contrary view(s) taken by any other party or statutory authority qua this document.